You mean a dividend? It should lower their effective tax rate, and it benefits the stockholder's bottom lines positively.

Lowers the tax rate but also lowers their interest rate from investing that money. I wonder what the differences would be for a set amount for a set time frame. It seems to me that held cash can gain interest indefinitely but a dividend will only lower their taxes once for each amount paid out.

This bot has been removed from circulation due to a malfunctioning morality chip.

Notice the new talking points by the haters. Apple is TOO successful, has TOO much money, is taking TOO much profits in the mobile industry, thereby starving innovation. Seems everybody is clucking their tongues about Apple these days. IT wanks were just fine with the Microsoft hegemony but Apple is just TOO big to accept. God forbid Apple should call the shots these days.

These same people laughed at the notion of Apple ever being so successful, just 18 short months ago.

Why not simply use cash to offset debt in the calculation and add what's left back? In this model had Apple had $400B in cash it would be worthless. Or am I missing something lol

Your not. That is the Fallacy of EV a metric invented by debt laden companies to confuse investors. If Apple had 461 billion in cash, they would have a EV of $0.

While EV shows you what it would take to buy out a company free and clear, it is not a good measure of value. Debt and Cash both figure into investors decisions and are already components of the stock price. EV is not a way to describe company worth. Many companies peak in EV just prior to filing bankruptcy.

Lowers the tax rate but also lowers their interest rate from investing that money. I wonder what the differences would be for a set amount for a set time frame. It seems to me that held cash can gain interest indefinitely but a dividend will only lower their taxes once for each amount paid out.

Less income from investments, yes, but their liquid assets can't be returning very much in this ultra-low interest rate environment. Probably a lot of it is held in commercial paper and other kinds of short term notes. Besides, Apple's mission is not to become the world's largest bank or investment house. Dividends are not generally one-time events. Most companies pay them out consistently at an annual rate paid quarterly. Really good companies increase them regularly.

You know, a lot of pension funds and mutual funds will not even consider buying a stock that pays no dividend. Some are prohibited from doing so. Something to keep in mind while you ponder whether Apple paying a dividend would be good for you as an investor, in more ways than one.

On a vaguely related note, of the 97B Apple has in cash and investments , $64 remains offshore, and thus cannot be repatriated to the US without paying taxes. So not all of the 97 is available to distribute to shareholders free and clear.

$64 billion in cash held offshore? Wow.

China assembles Apple products and exports it to America which makes it look like China is reaping huge profits. But it doesn't seem so to me.

With so many American corporations keeping their profits offshore, that will definitely skew the trade imbalance figures (US-China trade, US-Japan trade).

An estimated $8,000 billion to Apple's $460 billion. Apple still hasn't met the highest market cap in history for a publicly traded company. Back in 2007 Exxon was at $480 billion when PetroChina topped $1,000 billion.

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Why would that be a good idea? AAPL would have to drop below that level to make it worthwhile for me to exercise a put option at that price. As I am long on Apple (and well ahead of even a $350 price) then there are only three reasonably identifiable risks. 1) Apple's value crashes and goes below whatever put option price I get. 2) Apple's value crashes and drops below a level that still gives me a reasonable return on my investment. 3) Apple goes out of business.

Notice I even included the last one in the "reasonable" list...when, of course, it's ludicrous. So you want me to pay 2% for essentially a scenario that is less likely than me winning the lottery. Hmmm. I wonder if you would like to be on the other side of the deal?

Worst case scenario with options: They expire. You lose 2%.

Worst case without options: Apple goes under $350 and you lose mega percent.

An estimated $8,000 billion to Apple's $460 billion. Apple still hasn't met the highest market cap in history for a publicly traded company. Back in 2007 Exxon was at $480 billion when PetroChina topped $1,000 billion.

Is that a trillion in US Terminolgy?

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"

You mean a dividend? It should lower their effective tax rate, and it benefits the stockholder's bottom lines positively.

Please don't dispense dodgy tax advice. If a substantial chunk of Apple's cash is held in low tax environments abroad -- as it most likely is -- the company and its shareholders will incur a massive tax bill if they bing it back to the US to pay their dividends.

Independent of that, you do realize that dividends are paid from after-tax income for corporations, right?

Wow. Well I didn't realize that had already been achieved. So Apple getting there is not a fantasy.

The trillion dollar valuation for PetroChina was a bit of a bogus number (not unlike Cisco's famed half trillion valuation at one point). It was soon after their IPO (in 2007, I think), with very little public float, and the stock markets in China being on a truly bubble-ish tear plus huge demand for the stock made the price soar. It didn't last long.

Their valuation today is the upper $200B range, far less than that of Apple.

The question really is whether Aaple could be the world's first sustainably trillion dollar market cap company.

Worst case without options: Apple goes under $350 and you lose mega percent.

It's exactly that kind of "analysis" which is useless. Actually, the BEST case if I did a put option is that I lose 2%. Best case if I don't is that the stock continues to increase and I reap all the profit.

Worst case for me is if the stock goes under my purchase price. That's as close to improbable as you can get.

. . . What a story! Now we have a new category killer iTV, a new iPad 3, new iPhone soon, and a stockholders meeting coming up with a lot of buzz surrounding it. Most valuable company in the world. Patents filing. Wow.

I knew they were going to make it big but this is more than I expected of them.

The poor analysts are lost on their raft in the ocean, they just crossed the bow of the queen Mary II. I think they've finally noticed how big Apple is.

This is a memorable metaphor, all the moreso because the proportions seem exactly right.

Please don't dispense dodgy tax advice. If a substantial chunk of Apple's cash is held in low tax environments abroad -- as it most likely is -- the company and its shareholders will incur a massive tax bill if they bing it back to the US to pay their dividends.

Independent of that, you do realize that dividends are paid from after-tax income for corporations, right?

I'm sure Apple isn't looking for tax advice from me or you, but if the company is going to use the cash for anything, dividends or any other purpose, then it may have to be at least partially repatriated. But from all the information I have picked up, they would not have to repatriate cash to pay any kind of modest dividend.

You mean a dividend? It should lower their effective tax rate, and it benefits the stockholder's bottom lines positively.

Quote:

Originally Posted by anantksundaram

Please don't dispense dodgy tax advice. If a substantial chunk of Apple's cash is held in low tax environments abroad -- as it most likely is -- the company and its shareholders will incur a massive tax bill if they bing it back to the US to pay their dividends.

Independent of that, you do realize that dividends are paid from after-tax income for corporations, right?

You beat me to it. I was going to make both points.

It amazes me how often people with no clue how finance works insist on offering advice. I wonder if they spend their time looking over brain surgeon's shoulders and offer advice on how to do that, too.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

I'm sure Apple isn't looking for tax advice from me or you, but if the company is going to use the cash for anything, dividends or any other purpose, then it may have to be at least partially repatriated. But from all the information I have picked up, they would not have to repatriate cash to pay any kind of modest dividend.

Really? Wu is suggesting a dividend that would cost $70-80 B. They don't have anything close to that in the U.S. Most of their money is overseas.

What 'information that you've picked up' says otherwise?

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

Timing is everything. Too much upside left and as we all know AAPL Stock can get battered around for a period each Quarter as it builds momentum to skyrocket up, which could make it hit one of those Stop Orders, and cost you a lot of upside. Nothing is ever "risk-free" in risky assets, but right now, even with EU issues and all that garb looming, that can batter the Market around, I personally took off my Stop Orders on AAPL as every time I have them, they engage and it costs me lots of $$$$ in the long run. Going Long means you do have to have a pretty strong stomach sometimes, though, but if the fundamentals say they will (and they do), usually in the end it will hopefully pay off greatly.

Quote:

Originally Posted by glui2001

Crap sold at $454!

Now why would you do that?!

I was just talking to my friend today about this. Sometimes, in the Market, you concentrate too much on "What other people are doing". If you treat a Stock as what it is: A possession of yours that you buy with the intent to watch grow and usually sell to someone else when you feel it hits your peak levels of confidence-evaluation, you can have a more rationale level of when to Sell (and Buy). For example, I don't look at Apple as "what is it worth today to this Market". I look at it as "What do I think it's worth, what would I sell it for"? Just like if I was selling a car. I at this time wouldn't Sell Apple for lower than mid $600's, and that's just now (I too have to be instilled confidence by Apple, of course, as they continue to do that, I raise my "Stock Worth".

When Apple popped to $450's, it was great, but still ways to go to get even near fair valuation. And I don't sense any worrisome activities occurring at the very least throughout 2012 (more like 2014). Of course, the game is how much you can stomach the inevitable manipulation and stories to not convince you to dump it for irrationally cheap levels.

Timing is everything. Too much upside left and as we all know AAPL Stock can get battered around for a period each Quarter as it builds momentum to skyrocket up, which could make it hit one of those Stop Orders, and cost you a lot of upside. Nothing is ever "risk-free" in risky assets, but right now, even with EU issues and all that garb looming, that can batter the Market around, I personally took off my Stop Orders on AAPL as every time I have them, they engage and it costs me lots of $$$$ in the long run. Going Long means you do have to have a pretty strong stomach sometimes, though, but if the fundamentals say they will (and they do), usually in the end it will hopefully pay off greatly.

Now why would you do that?!

I was just talking to my friend today about this. Sometimes, in the Market, you concentrate too much on "What other people are doing". If you treat a Stock as what it is: A possession of yours that you buy with the intent to watch grow and usually sell to someone else when you feel it hits your peak levels of confidence-evaluation, you can have a more rationale level of when to Sell (and Buy). For example, I don't look at Apple as "what is it worth today to this Market". I look at it as "What do I think it's worth, what would I sell it for"? Just like if I was selling a car. I at this time wouldn't Sell Apple for lower than mid $600's, and that's just now (I too have to be instilled confidence by Apple, of course, as they continue to do that, I raise my "Stock Worth".

When Apple popped to $450's, it was great, but still ways to go to get even near fair valuation. And I don't sense any worrisome activities occurring at the very least throughout 2012 (more like 2014). Of course, the game is how much you can stomach the inevitable manipulation and stories to not convince you to dump it for irrationally cheap levels.

Now that is some solid reasoning. It explains what I am doing, and even though it causes a bit of tension, I am not selling Apple until it gets to something close to fair value. An amount which I perceive to be going up a lot faster than the stock price. When I picked this stock in 2001 I expected it to be the next Microsoft. It has gone way past that. Triple that. Yet where is the stock profit? It seems Apple is actually TOO BIG to be fairly priced! Now that's a apple needs its own exchange !

What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto